Breakfasttime Cereal Company manufactures two breakfast cereals in a joint process. Cost and quantity information is as follows:

Joint Cost			Cereal	Quantity at Split-Off Point			Sales Price per Kilogram
$	93,000		Yummies		12,300	kilograms	$	6.30
			Crummies		8,300	kilograms		7.80

Breakfasttime Cereal Company has an opportunity to process its Crummies further into a mulch for ornamental shrubs. The additional processing operation costs $1.80 per kilogram, and the mulch will sell for $12.00 per kilogram.

Required:

1-a.

Compute the net incremental revenue per kilogram if management decide to process Crummies into the mulch. (Round your answer to 2 decimal places.)

Net incremental revenue

$2.40

per kilogram

1-b.

Should Breakfasttimes management decide to process Crummies into the mulch?

	Yes
	No

2.

Suppose the company does process Crummies into the mulch. Use the net-realizable-value method to allocate the joint production cost between the mulch and the Yummies. (Round your calculation of relative proportions to 3 decimal places.)

	Allocation of Joint Cost
Yummies	$
Mulch	$